If you leased your vehicle, there will come a day when it expires. And at that point, you have three options:
- Purchase the vehicle
- Return it to the dealer and walk away
- Return it to the dealer and lease or purchase a new vehicle
While there are benefits of each option, many people make the decision to buy out their lease. It may not be the right choice for you, but it’s definitely worth your consideration.
Here are some of the many benefits of going down this path:
1. You Know the Car Inside and Out
Even though today’s motor vehicles are more reliable than ever before, they’re far from perfect. So, if you find yourself driving a car you can trust and enjoy, you should stick with it for as long as possible.
When you buy out your car lease, you’ll know exactly what to expect from your vehicle. After all, you’ve been driving it for the past few years.
With no surprises, it’s much easier to go through the purchase process with a clear mind (and plenty of confidence).
2. Save Money
If you decide to buy out your lease, you’ll do so at a price – known as the residual value – that you agreed to when entering the lease contract.
Since this price is much lower than the cost of a comparable new vehicle, you can save plenty of money.
For example, the residual value of your leased vehicle may be $30k. However, it could cost you $50k to buy the same vehicle brand new.
No, you won’t get that new car smell and only a handful of miles on the odometer, but you’re saving money on a car that you know like the back of your hand.
3. Avoid Fees
One of the biggest drawbacks of leasing are the fees associated with doing so.
For example, if you drive more miles than your lease allows, you’ll get hit with a charge – such as $.20/mile – for every mile in excess of the allowance. That can really add up.
Just the same, you’re charged for any damage to the vehicle. Once again, this can add up.
By the time you trade in your lease, you may find that you owe thousands of dollars. Does it really make sense to pay this?
If you decide to buy out your car lease, visit your local dealership for more information on the process and how to get started.
When the time comes, ask your dealer’s finance department to assist you with securing financing (unless you’re paying with cash). While they’re doing that, shop around yourself. You may be able to find a lower rate online or through your local bank or credit union.
Even if you’ve never considered it in the past, think long and hard about the benefits of buying out your car lease. You may decide against it, but there’s also a good chance that you realize this is best for your financial future.